Online poker: The shutdown that did happen
- Apr 26, 2011 - 2 -
The looming government shutdown feared by millions did not happen. Lawmakers broke the fiscal deadlock and business continues as usual today. But one week following the averted interruption of certain government services, another type of shutdown—also a result of government action—did occur: a shuttering of the $6 billion online poker industry. Ultimately, society at large stands to win from this shutdown.
Showing its tough side, the FBI indicted April 15 the three biggest Internet poker profiteers—PokerStars, Full Tilt Poker, and Absolute Poker—for bank fraud, money laundering, and illegal gambling, freezing more than 75 bank accounts in 14 countries. It also hopes to recover $3 billion in fines. While the offshore companies’ assets have been frozen, the Justice Department has stated it will temporarily restore a handful of their domains to free up the accounts so the poker moguls can release the outstanding funds to their U.S. customers.
The impact of “Black Friday” was felt immediately. In the days prior to the federal grand jury dealing the trio of offshore Internet poker sites a losing hand, more than 77,000 people participated in some form of online poker wagering at any given time. That number fell to roughly 60,000, a 22 percent drop, in the following four days, according to the Associated Press. Overnight, visitors to the Websites were greeted with a new message: “This domain has been seized by the F.B.I pursuant to an Arrest Warrant.”
Basis for the Justice Department’s action stems from a 2006 law to block U.S.-based customer transactions to offshore online gambling merchants. The law’s aim: to drive people away from the longtime illegal practice of Internet gambling and thereby slow cash flow to offshore sites to a trickle. The Unlawful Internet Gambling Enforcement Act sailed through Congress as part of a broader bill in the waning hours of Congress in 2006—409 to 2 in the House and with no objections in the Senate—before President Bush signed it into law. The Ethics & Religious Liberty Commission ardently supported the bill.
Following its enactment, several online sites moved overseas in an attempt to bypass the law while still tapping the U.S. market. Others, like PartyPoker.com, shut down altogether. Last June, the law gained greater traction when its long-delayed regulations took effect. Still, the Justice Department had mostly left offshore poker gambling sites alone. Until now.
But many ask, what’s the harm with online poker anyway? Nothing, according to those inside the industry. “Online poker, I believe should be legalized in the U.S. because, you know, it’s in the privacy of your home,” said Vince Van Patten, host of “World Poker Tour,” on CNN April 18. “It’s a spice of life. It’s entertainment and there’s no harm in my opinion.”
Not all agree. “Well, yes, in fact that is one of the problems,” responded Barrett Duke, the Ethics & Religious Liberty Commission’s vice president for public policy and research, who was also interviewed by CNN. “It is done in the privacy of your own home. People’s lives are being destroyed by the thousands in this country because of gambling. The last thing we need is for that to be streamed into their homes 24 hours a day, seven days a week. It is just a bad policy to have that, and I think that the federal government has made the right decision on this.”
What proponents of legalized online poker fail to realize is that wagering on such games is not a victimless crime. The ease and addictive power of point-and-click gambling from the privacy of a personal computer all too often yields financial ruin and broken families.
One challenge in winning the public debate is overcoming online poker-wagering’s allure. ESPN, with its “World Series of Poker” programming, has glamorized it. Fox Sports Networks, another poker outlet and place where online poker sites have sunk millions in television advertising, has popularized it. Kids younger and younger are drawn by the game’s promise of quick money.
Wagering in any fashion online is always a losing bet. Thankfully the Justice Department now seems to get that message. Yet despite the 2006 anti-online gambling law, there is an ongoing push in Congress to legalize, regulate, and tax the industry. Hopefully lawmakers will stand by the wisdom demonstrated five years ago and lay aside any entertainment of the idea of gambling with the futures of America’s families.
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1 On Apr 26th, 2011, at 8:40pm, Lyle wrote:
This article is riddled with inaccuracies. Where is the research? Any research at all that supports “People’s lives are being destroyed by the thousands” by online poker? In fact many reports have indicated the exact opposite. This is an attempt to police morality. Frankly, it’s none of your business what I do in my home.
No matter, the latest action by the DOJ will be the catalyst for future legislation. It’s going to happen eventually.
2 On Apr 27th, 2011, at 9:38pm, matt wrote:
this article is so bad i don’t even know where to start. how can u make such a broad ignorant statement that “wagering online in any fashion online is a losing bet” with absolutely no data or facts to back this up. Do you not understand that thousands of jobs were lost? Yes people play online poker for a living and have been “wagering online” for years while making a substantial profit. More families lives have probably been destroyed by scratch ticket addictions then online poker where u can set a stop loss,self exclude yourself and are limited to the amount of money u can deposit online in a short period of time. Barret Duke’s privacy of home comment is absurd. Who is he to tell me what to do in the PRIVACY of my home.